Skip to main content
EmploymentHuman ResourcesRecruitment

Parkinson’s Law and the Growth of Recruitment Companies

By September 19, 2019October 1st, 2019No Comments

In 1955, English historian Cyril Northcote Parkinson wrote, in an essay published in The Economist, the following adage:

“work expands so as to fill the time available for its completion”

He derived this dictum from him time spent in the British Civil Service, and consequently summed up the inner workings of every bureaucratic organisation ever since. Supporting equations and statistical studies followed, including a study of the increase in the number of employees at the Colonial Office while the British Empire actually declined. Parkinson reasoned that this was because 1) “An official wants to multiply subordinates, not rivals” and 2) “Officials make work for each other.”

I was talking to a recruitment GM earlier this week and we got onto the subject of a challenger brand entering the market. This business is going great guns, and seems to have a reasonably sensible growth strategy: Hire high-billing consultants with good reputations. Pay them slightly more than others. Charge your clients slightly less. Looking in as a casual observer and supplier, this seems to be currently working well. If history is anything to go by however, there are inevitable speed bumps ahead. Growing a recruitment firm should be easy. It’s as simple as hiring people who are profitable and replicating this over and over. Let’s say the average recruiter generates $300k a year of gross profit. If you go and hire 5 average consultants, you should generate a gross profit of $1.5m. Want to get to $3m? Hire another 5! What a beautiful industry to be involved in!

Except there’s a catch, and that’s where Parkinson’s Law effects even our money-driven industry.

This is how we typically grow recruitment businesses: Once you hire your 5 consultants, you’ll want a payroll/accounts person right? Maybe it won’t be a full-time requirement yet, but the rate that you’re growing, it will be in a couple of months. In the meantime there’s project work they can do. In addition to Parkinson’s Law, a number of people have offered extensions (or “corollaries” if you’re feeling particularly bookish) to the law. One of these states:

“Work complicates to fill the available time.”

So your old excel spreadsheet is no longer enough. You need a new system, a new process, consultants need training, things need to be colour coded, and sure enough, the accounts assistant is now promoted and given a pay rise. Through their desire to be busy they’ve made themselves more busy, and now require a junior to report into them. The same goes with your top biller. With one Candidate Manager they’re generating $600k a year. They put together a very sensible case that with another one, they’d break the million dollar mark. You acquiesce and add another non-revenue generating head to the mix. Perhaps you as the business owner have always ran a profitable desk as well. It was probably your reputation and stellar billings that gave you a platform to launch the business in the first place. But with this growing team, you can’t service your clients any more. You up your basic salary, stop making revenue, and start managing full time. You become very expensive.

From being a “fly by the seat of your pants” recruiter, bashing out proposals on your smart phone, you now have a marketing person (or team), creating exquisitely branded PDFs. You lose your shit and call a meeting when a new starter doesn’t capitalise the first letter of your company name in an email. You have “grown up” as a business, but everything takes so much longer now. You’re busier and more stressed than ever. Likewise, those top billers that you snaffled from a rival come at a price. You promised them skin in the game, a voice at the top table, a chance to become strategic. Suddenly, they are no longer “just a recruiter” and Parkinson’s Law applies to their own working day. Instead of doing deals, they spend Wednesday arguing with you via email about font size on business cards. They’re given a reduced target as they need some time to “work on the business”. Another corollary applies to every task:

“The amount of time that one has to perform a task is the amount of time it will take to complete the task.”

Ultimately you’re left with a high-quality, top-heavy, well-branded, slow-moving, no profit recruitment firm. And you send out a request for a too long meeting with too many people to try and fix it. I know. I’ve been there.

Do you want my advice? Are you even still reading this? Well who cares, you’re getting it anyway. There is nothing wrong with growth, ambition, and quality work. However, in this industry we need to be mean, stay lean, perhaps buy a grilling machine. And next time you feel the need to spend 8 hours creating a branded template, remember the Stock–Sanford corollary to Parkinson’s law:

“If you wait until the last minute, it only takes a minute to do”